Nebraska Governor Dave Heineman has scrapped his alternative tax reform plans of reducing or eliminating individual and corporate income taxes by ending up to $2.4-billion dollars in sales tax exemptions.

Heineman told reporters Saturday that he’d heard “loud and clear” the criticism by opponents…especially farm and business interests…that both of his proposals were threats to the state’s manufacturing industry and agriculture.

Omaha Senator Beau McCoy, a co-sponsor of the two bills making up the governor’s plan, says he’ll ask the legislature’s Revenue Committee…probably on Wednesday…two kill the bills and undertake a study of the state’s tax system over the next year.

A number of senators…including John Harms of Scottsbluff…had been calling for a comprehensive tax study before acting on any major reform proposals, the governor’s or anyone else’s.

McCoy says the governor’s proposals accomplished a lot by paving the way for a “much broader discussion” on taxes. He says public comments show that Nebraskans want to talk about expanding the sales tax to include services, reforming property taxes, and taking a careful review of existing economic development incentives.

Revenue chairman Galen Hadley of Kearney says he wants to create a tax study committee made up of his committee’s 8 members and other interested senators that would hire outside experts and use staffers from the Revenue Department and Legislative Fiscal Office.

There also a bill already introduced by Senator Paul Schumacher of Columbus…LB-613…to create a Tax Modernization Commission with a different makeup. It’s scheduled for a public hearing Tuesday before the Legislature’s Executive Board.